Labor’s Texta moment

It’s only January but we’ve already got the quote of the year. “We will be getting the butcher paper and Textas out and solving the country’s problems." That’s how an unnamed federal Labor MP described what will happen on Sunday at 2pm in the caucus room at Parliament House in Canberra.

The Prime Minister has called together all her 102 MPs for a “brainstorming" session. Hopefully all the country’s problems will be solved in time for the next federal election.

The last time anyone was let loose with butcher paper and Textas in Canberra was the 2020 summit three years ago. The 1000 best and brightest Australians gathered to “harness the best ideas for building a modern Australia". That turned out well.

In the end, participants didn’t need their butcher paper. Given
Kevin Rudd
and then
Julia Gillard
have acted on only about a dozen of the 1000 ideas from the summit, the best and the brightest would have done just as well with a couple of Post-It notes. With suggestions like a 1 per cent tax on the internet, it’s no wonder the summit has been ignored.

The 102 federal Labor MPs gathering in Canberra on Sunday hopefully won’t be as far removed from reality as were the 1000 people at the 2020 summit. Hopefully this time the Textas will be put to better use.

To be fair, back in 2008, the full extent of the global financial crisis was not known. Back then there was still hope for a V-shaped recovery for the global economy and for the world’s equity markets. Four years on, we now have the International Monetary Fund warning of a “1930s moment" if the fund doesn’t get $1 trillion to bail out not just Greece, but also Italy and Spain. In 2009,
Barnaby Joyce
was laughed out when he warned of the consequences of the United States defaulting on its debt. Now, not so many people are laughing at Barnaby.

If Labor’s brainstorming session is like others of its kind, a “facilitator" is going to start by getting people to shout out words and phrases that sum up the party’s predicament.

Then, once a note-taker has written down in red Texta all the federal government’s problems, they will write down all the solutions in blue Texta.

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You can imagine what MPs will be yelling out: “lack of vision"; “no clear message"; “no one trusts us any more because of all our broken promises"; “Kevin Rudd". There’s validity in all these points. And these problems are all largely self-inflicted. But federal Labor is actually facing a much bigger problem. It is facing the problem confronting all governments in the Western world. This problem can be summed up in one word: “austerity".

The shadow treasurer,
Joe Hockey
, got it right when he said on ABC Radio on Wednesday that Australians should prepare for two decades of uncertainty.

“The bottom line is that we are going to have a very volatile period, economic period, for the next 10 to 20 years . . . And the best way to inoculate ourselves against that volatility is to . . . reduce debt right across the board – in corporate Australia, in family homes and of course at the government level."

On Sunday, no Labor MP is going to say “maybe we should listen to Hockey". Maybe someone should.

The reality of austerity and the reality of what the electorate is doing every day as it starts skimping and saving and paying off debt runs completely counter to Labor’s rhetoric, which is that spending kept Australia out of recession.

Voters aren’t always stupid. They know that Australia’s government debt is nowhere near as bad as the rest of the world’s, but they also know that the last Coalition government left Labor a budget surplus and almost zero government debt. And as much as Keynesian economists like to pretend otherwise, voters realise that government budgets and household budgets are not very different.

In the long run, neither governments nor households can spend more than they earn, and debt, eventually, has to be paid back.

This is what Labor MPs should be talking about on Sunday.

All the debates the policy elites in this country have been having recently about productivity and industrial relations, sustainability, innovation, manufacturing and so on might not count for much at the next federal election. The contest could rest on the basic issue of how the parties are perceived. One side is for “spending", the other is for “saving".

The side that promises to spend more usually wins. However, in the economic turmoil of the next 20 years, maybe this rule is about to be broken.